Sunday, November 23rd, 2014

[ To my email subscribers: I’m about to start cutover type activities to my new mailing list system. So if you get some accidental test messages in there, my apologies. I’ll be in touch further as this moves along – Aaron. ]

Yet by late September of this year, the press – especially the technology press – had begun asking some serious questions, as the Downtown Project suddenly laid off 30 people – 10% of the total it then directly employed. Alongside portentous headlines announcing this “bloodletting” appeared claims that Hsieh had “stepped down” from his position of leadership of the project. A damning open letter from the Downtown Project’s former “director of imagination”, David Gould, called the operation from which he had just resigned “a collage of decadence, greed and missing leadership … There were heroes among us,” he added, “and it is for them that my soul weeps.”

Technology web site Re/code also ran a seven part series on the Downtown Project, some of it unflattering, including a part focused on a spate of suicides there, and other on about a prominent failed startup.

I made the obligatory pilgrimage to the Downtown Project in 2013 and wrote up my observations in a three part series, of which you can read part one, part two and part three.

I noted at the time the audacity of one project trying to completely transform a place like downtown Las Vegas:

Las Vegas has the single most savagely bleak downtown of any major city I’ve ever visited. The Downtown Project is almost literally starting at zero. There are practically no assets. So anything that the Downtown Project accomplishes needs to be seen against that backdrop. Most of these other cities have been at the downtown redevelopment game for 30+ years, have massive architectural and institutional assets, and have already been the recipients of untold billions in investment, much of it public money.

I also mentioned that the accolades the project had received in the press were disproportionate to the actual accomplishments to date:

Honestly, it’s a bit infuriating as a guy who lived in Indy, Louisville, and Providence to see a place where so little has happened garner such massive press and accolades when most other regions the size of Vegas have done more while getting far less attention.

Indeed, it’s hard to think of a single downtown redevelopment effort that received as much glowing coverage as the Downtown Project. Not even Dan Gilbert’s Detroit efforts received such fawning attention. This is an accomplishment I’m not sure most people fully appreciate. Tony Hsieh was very savvy in using his status as a tier one entrepreneurial superstar, along with a bank of free “crash pad” apartments for visitors, to create buzz and publicity. Other cities should definitely stand up and take notice.

However, the very success of the project on the PR front primed it for inevitable blowback when problems arose. As the Guardian piece notes, “The story fairly demands an apocalyptic ending.” The higher a star soars in the celebrity firmament, the more knives get drawn when anything disturbs the pristine image. The Guardian reporter also said, based on a very recent trip, that reports of the project’s demise are premature.

So the Downtown Project has run into turbulence? Film at 11. Startups are hard, risky, trouble fraught endeavors. Tony went through multiple meat grinders in the past, and if you’ve read his book it’s by no means certain that Zappos would even survive. There were many times it could have gone under. Clearly the man has a massive appetite for risk, and the Downtown Project was certainly a risky and ambitious undertaking.

The initial puffery was overblown. Time will tell if the blowback is as well. Success was always going to be difficult. I noted last year that the project was going against the grain of the DNA of Vegas as a city, was very reliant on “best practices” type solutions vs. the innovative cultural approach of Zappos, and that “curating” a city was inherently dubious. Yet I admire the ambition and believe they’ve done a lot of things right.

I doubt that the project will ever realize the full, audacious vision that was laid out at the beginning. The commitment of Zappos to its downtown HQ probably prevents a complete flameout. But it may turn out that Tony was unwise to have so heavily promoted the project up front. That has more or less ensured that anything less than perfection will be judged as a failure. He set the bar so high, it is almost impossible to clear. Had there been more modest ambitions, then probably even incremental progress against the backdrop of the disaster zone that was downtown Las Vegas would have been seen as a win. But perhaps in one example of how the Downtown Project did match perfectly with the Vegas DNA, Tony Hsieh elected to pile all his chips on Red 14.

Full Disclosure: I had previous financial relationships with Downtown Project related entities and stayed for free in one of their crash pads during my stay.

Wednesday, July 16th, 2014

This week back to the timelapse with a gorgeous high definition look at Las Vegas by Keith Kiska. This is one for full screen high def to be sure. If the embed doesn’t display for you, watch on You Tube. h/t Likecool

As a bonus, here’s another timelapse of Los Angeles called “Above LA.” If this embed doesn’t display for you, watch at Vimeo. h/t Likecool

Thursday, August 15th, 2013

My latest piece is online at Governing and is called “Beyond the ‘Brain Drain': How Cities Really Need to Sell Themselves.” Though the “brain drain” paradigm is dominant lens through which cities pursue a talent strategy, it’s incomplete and leads to lax efforts to actually recruit people. I suggest actually sales, not just marketing, is critical, and highlight a couple examples – Vegas and Chicago – where we are seeing the start of a new recruiting approach. Here’s a sample:

The dominant talent paradigm in America today is “brain drain.” The idea is to prevent educated people, particularly the young who grew up or went to school in a particular place, from leaving.

This is a model with serious flaws. Notably it implies a sort of “wages fund” view of talent in which each community is endowed with a fixed reservoir of it and the goal is to prevent leakage. It downplays attraction, both “boomerangers” and true newcomers, and by implication suggests that there’s not much to recommend about a community if you didn’t grow up or go to school there. And it misses the point that in an ever more globalized, diverse, complex world, a place’s best interests are not well served by people who’ve never lived anywhere else.

As for the answer to that question, some of it is a matter of how you define success. At a base level, there’s already been success. Downtown Las Vegas is now on the mental map and the discussion agenda for urbanists around the country. The product offering is already better. Also, the original concept of building an extended urban campus for Zappos seems likely to succeed. Downtown will certainly be light-years ahead of where it started as a live/work/play environment.

Other goals are more speculative. Can Zappos avoid the sub-linear scaling curse? We shall see, but given that the same leadership is running both the company and the Downtown Project, this is a good laboratory and case study for business schools to look at.

The big, aspirational goals around making Vegas the most community focused city in the world, and the co-working and co-learning capital of the world seem much more challenging. My previous post around common traits of small cities shows why there’s lot of competition in the community department. Also, with NYC having an estimated 50 co-working facilities already, it seems unlikely Vegas is ever going to win in co-working on volume of activity.

Still, better to aim high than low I always say. But looking forward to how Downtown Project plays out, I see three major areas of concern: the conventionality of the program, the fact that it goes against the DNA of Las Vegas, and challenge of curating a city versus running a company.

The Conventionality of Downtown Project

One thing that struck me when I saw Tony’s original talk at BIF-8 is the conventionality of much of what is being done. The project has a reputation for being very innovative, but most of the components of it are conventional wisdom. Or “best practices” if you will.

Car share, collisions, fashion, tech startups, co-working, art, music, coffeeshops, restaurants, etc. Everything is exceptionally buzzword compliant, right down the PBR on tap in the local establishments. All of the boxes are checked perfectly – too perfectly.

I described the project as Ed Glaeser meets Richard Florida which highlights how this happened. They consulted with all the gurus, from Elon Musk to Burning Man. And all the leading edge thinking was incorporated into the program.

But think about Zappos for a minute. If you ever take the tour, it’s obvious that this is a very unique and different company. Here’s a snap:

The scene at Zappos

The Zappos culture and service mentality did not come from taking the best of Seth Godin, Jim Collns, etc. and creating a company culture from them. I’m sure that their HR policies, finance, tech, etc use many methods and tools common to all companies. But the company is not an amalgamation of best practices. Nor is the unique company culture and zaniness just frosting applied to a cake that’s similar to any other. It cuts through everything they do.

By contrast, I just don’t get the same sense of uniqueness in downtown Vegas. What makes downtown Vegas unique is unrelated to Downtown Project (e.g., casinos). There are definitely things I think they’ve innovated on. The Telsa car share and modal integration take that to a new level. The crash pads and sales mentality create a “WOW” experience that’s clearly unique – and probably explain why the project has gotten so much positive press. But those things don’t change the fact that they are basically trying to do what Ed Glaeser and Richard Florida told every city to do.

This I think limits what can be accomplished. Every city has coffee shops, a budding startup community, bars and restaurants, etc. They are all adding livable streets infrastructure and such. They’ve all got a lot of exciting stuff happening. The challenge is how to create the Zappos of cities. That is, a place when you go there you’re blown away by how unique it is and how cool is. And which has a certain polarizing effect, much like Zappos itself, which is not for everybody. Definitely the “WOW” thing they’ve got going with rolling out the red carpet is a great start. A willingness to stay a bit niche and not actually scale so they can preserve the uniqueness might be part of it too (more on this later).

To be fair, given how bleak downtown Vegas is, they pretty much have no choice but to build the basics, which every city needs. Almost by definition, the basics are conventional. So I should probably give them more time to see how this evolves.

Challenging the Vegas DNA

Another challenge is that they are directly going against the brand and cultural DNA of Las Vegas. Vegas is about gambling, etc. While there are definitely regular things in Vegas, including nice boring suburbs, the core of it seems to be in everything centered around casinos.

Downtown Project not only isn’t trying to roll with this but is actively cutting against the grain. The tech fund isn’t investing in gaming technology companies, for example, which is the obvious logical niche. Rather than trying to do cool-urban casinos or some such, they actually bought a casino (the Gold Spike) and ripped out the gambling.

I understand this perfectly because it is exactly what most smaller, unhip cities try to do. You want to join the club, so you think you have to fit in. I have noted how the one thing everyone in the world thinks of when they think of Indianapolis, the 500-Mile Race, is something that’s never talked about by the local urban crowd. To them auto racing is declasse and an emblem of the past city they’d like to think they’ve transcended. Indy is way more than auto-racing today, goes the logic. Almost every city goes through this phase.

One of the things I’ve been most passionate about and that I feel most strongly about generally is the idea that cities need to be themselves. They need to understand who they are and build the future around that, not around junking the past. Yes, change to be sure. But remember who you are. My post “The Brand Promise of Indianapolis” gives the overview of my thinking on that. Cities simply cannot sever their roots and expect to thrive in most cases.

Going against the DNA of your city mean’s you are swimming upstream. As Paul Graham noted in “Cities and Ambition“:

How much does it matter what message a city sends? Empirically, the answer seems to be: a lot. You might think that if you had enough strength of mind to do great things, you’d be able to transcend your environment. Where you live should make at most a couple percent difference. But if you look at the historical evidence, it seems to matter more than that.
….

A city speaks to you mostly by accident—in things you see through windows, in conversations you overhear. It’s not something you have to seek out, but something you can’t turn off. One of the occupational hazards of living in Cambridge is overhearing the conversations of people who use interrogative intonation in declarative sentences. But on average I’ll take Cambridge conversations over New York or Silicon Valley ones.

It’s very tough to overcome the message that a city repeats in your ear over and over again. And for Vegas trying to reinvent itself around creative collisions, it’s doubly hard as Richard Florida put it in last place for creative class share among large cities. Trying to go from worst to first is a tough challenge indeed.

I come from a consulting background and so am obsessed with strategery. So my own biases are showing. But what do companies obsess about? Their unique customer segments and their value propositions to it, along with the financial model for realizing value. In short, it’s about the brand DNA. It amazes me to no end that while most companies try to convince you how unique and different they are from every other company in their market (Zappos being a great example), virtually every city is trying to convince you that they’re just like every other cool city (tech hub, creative, etc).

What’s the first thing a new creative director does when trying to revive a fashion house that’s fallen on hard times? Pay a visit to the archives. What is this company all about? It’s the same with cities. What is this city all about? And with most cities that question was asked and answered a long before we got there or were even born. The founding ethos of a city is almost impossible to displace. (The best documentation of this is E. Digby Baltzell’s “Puritan Boston and Quaker Philadelphia” which showed how the founding ethos of the Puritans and the Quakers permeated every aspect of those cities’ cultures up until the present day). So to understand this you have to dig below the surface (which in the case of Vegas would be gambling I guess) and become a sort of anthropologist. I’m sure my surface analysis of Vegas as about casinos is off and that deeper digging needs to be done. But it doesn’t appear to be a creative capital type of place, etc.

So in thinking about how to transcend conventionality, I think aligning with not against the civic DNA is important. In fact, the Downtown Project already has one area where they have done this and it is by far the most compelling thing I’ve seen them do. This is a hybrid of what they call “Subscribe to Las Vegas” and “Las Vegas Makes You Smarter.”

The idea behind subscribing to Las Vegas is that not everyone can or wants to move there. But that doesn’t mean you can’t be a part of the community. Some people are choosing to live or work there part time – say one week a month. The notion is that one purposeful visitor or part timer who is fully engaged in the community and “collisionable” is as good or better than a full time resident that is sitting home watching TV or at work in the burbs.

“Las Vegas makes you smarter” I believe came out of all the people Tony was bringing in to check out Downtown Project. He started asking them to give a presentation while they were in town. Most people said Yes. Hence the downtown speaker series and the notion of Vegas as a place you can get exposed to great minds and knowledge.

These are very in line with the Vegas DNA. First, most people don’t want to move to Vegas. But almost everyone would love to visit. So the idea of becoming a regular visitor to the city is an easy sell to a lot of people. It’s directly in line with the tourism focus of the city. Plus the air connections are superb to it’s easy to get into and out of. The speaker series also goes along with this. On any given day there are already tons of A-list people in Vegas. All you’ve got to do is convince a handful of them to make a community contribution.

So I think finding things like these are critical to building the “Only in Las Vegas” downtown experience that would be best. That’s not to say even this is without challenge. Downtown Vegas does not appear to be an intellectual center. While technology has certainly made it harder to tell, I didn’t see a single person reading a newspaper or book while I was there. There aren’t even that many boxes selling the local newspaper downtown, or a bookstore that I found. The book selection at the Beat Coffeehouse didn’t wow me either. However, I’m told the Inspire Theater that’s being built to house the speakers series will also have Vegas’ largest newsstand and that a bookstore is being looked at.

Can You Curate a Community and a City?

Zappos is known as a company that is very intentional about its culture. The know what they are trying to build, the invest in it, and they take great pains to protect it. But can you apply the same sort of intentionality to the city?

Real cities aren’t just about collisions, they are about conflict. “Iron sharpens iron, so one man sharpens another” says the proverb. This is different from “Hey, you’re cool. I’m cool. Let’s be cool together and collaborate.” It’s about people with very different agendas and ideas competing for the same space (in every sense of the word “space”). As Sam Jacob of FAT put it, “Cities are not about the perfect vision; they are not about a singular idea. They are about a collision of all kinds of incompatible demands.”

This is where the blank slate of downtown Vegas is a weakness. Because there’s nothing around but casinos and government, there’s really no vision I see apart from Downtown Project. And Downtown Project is investing in people and projects that are compatible with their vision. In effect, they are self-selecting for a monoculture, or for diversity within a particular worldview or paradigm. People who move to downtown Vegas personally or move their business there are likely going to do it because they are bought into the Downtown Project vision. It’s not exactly central economic planning, but there may actually be too much shared vision. I didn’t run into anybody who didn’t think the current approach was right on.

What’s more, because Downtown Project has been so successful in garnering mindshare and national press, it may have sucked all the oxygen out of the room. Unless a local casino billionaire or something gets attracted, anyone who wants to play in downtown Vegas is probably going to find it hard to gain mindshare unless they sign onto the Tony Show as it were. Another city with more of a plurality of players might actually be a better platform for getting noticed if you want to do your own thing.

This is where I think a city functions differently than a company. Downtown Las Vegas is not Zappos at a larger scale. It’s a fundamentally different kind of organism.

I’m not convinced it’s even possible to curate a community at more than a small scale anyway. Once more and more people come, you won’t have the same level of community because it will just plain be bigger and more anonymous. And what happens when people start showing up who don’t share the ethos, but are just there to consume? The magic starts to fade. This is exactly what Tony himself went through with the post-peak decline of rave culture and the erosion of PLUR.

Perhaps that magic fading ought to be the big goal after all, to create something that Downtown Project ultimately loses control of because it is so successful that others come in and build something on top of their platform that they never imagined. Maybe it won’t be the co-working capital of the world. But maybe it will be just as cool – or even cooler. Many of the best things turn out to be something their founders never could have imagined. It may be that the best tribute possible to Tony would be if his project became something radically different than what he ever thought it could be.

Concluding Thoughts

Though I obviously have my differences with some of the Downtown Project vision, you have to admire the chutzpah it takes to bring that much ambition to such as bleak place. What they’ve accomplished in such a short time with so little money and with so meager a starting platform in the city is very impressive, especially in contrast to the taxpayer money pits that exist in all too many places. And a number of the things they’ve done are particularly great, especially the subscriber model and their focus on selling downtown Las Vegas (which is truly the best I’ve every seen anywhere – definitely “WOW”). Clearly it’s a place everyone ought to visit to see for themselves – and to find out if Tony can talk you into moving there and starting your own business…

Thursday, May 30th, 2013

This is both a standalone piece and a bit of a bridge between the first installment in my Las Vegas Downtown Project overview and the second one.

One thing I consistently heard from the people in Vegas was their pride about the sense of community they had downtown. Tony Hsieh says it is the most community oriented place he’s lived. One of the Downtown Project official goals is to make Las Vegas the most community-oriented downtown in the world.

There’s certainly a big sense of community in downtown Las Vegas. I don’t want to diminish that in any way. And there’s a ton of enthusiasm about the city. But there are four things I think are nearly inevitable in any small city like Vegas. They are ubiquitous in the places I’ve seen. Those are boosterism, community, cross-pollination, and a sense of creating the future of the city.

Boosterism

This is the easy one since it exists everywhere. I just want to add that people who choose to live in a place like Las Vegas have an extra incentive to be evangelists for their city. That is, they have to defend the decision to live there, maybe even to themselves.

When I tell people I live in Providence, nearly 100% of the time they ask, “Why did you move to Providence?” Some of it is understandable curiosity. But part of it is a sort of challenge to defend a decision to move to a place that isn’t in the cool kids club. If I’d moved to one of the usual suspects places, say Boston or New York, I bet I’d get that question a lot less.

Some of the biggest skeptics about a move to a smaller region are often the natives. Natives tend to kvetch about where they are from, which irritates those who are there by choice to no end. It’s like a friend of mine in Indy said one time when she got fed up: some of us chose to be here.

It’s generally newcomers who are the most passionate cheerleaders for any smaller city. Beyond general boosterism, there’s an added chip on the shoulder and something to prove.

Community

Community is another hallmark. As I noted previously re:Providence, different scales have different virtues. One of the things about a small scale city is that because the various communities that make up the urban scene are so small, they have no choice but to hang out together.

Firstly, the small urban crowd and the cut against the grain choice I mentioned above generally create a bit of “us vs. them” solidarity by themselves. Then there’s the small number of venues, so you’re always running into people you know. Of course everybody in downtown Vegas runs into someone they know at the Beat – it’s the only independent coffeehouse downtown. And there’s nowhere to hide if you are a jerk or burn bridges. You’ve got to show your face among your peers. Clearly a “strong sense of community” is always the sell on bona fide small towns, and the generally sparse populations of most downtowns creates what is functionally a small town within the city. For all these reasons, strong community is nearly inevitable.

Cross-Pollination

Cross-pollination is also a huge benefit of small cities in general. The indie rock scene in Chicago is so big, for example, you could easily spend your time hanging out inside that community. Dittos for the architecture community and so on. In smaller cities, that’s not feasible. Because each group is too small to be self-contained, cross-functional collaboration and interaction is standard operating procedure.

Along with community, this makes small cities ideal for the type of serendipitous encounters we always hear are so valuable. I never once had a serendipitous encounter of value in all the years I lived in Chicago. But I had multiple of them in Indy.

Being a Producer Not a Consumer

Lastly, another common feature of small cities is what I term being a producer, not a consumer. People aren’t just there to soak in what the city has to offer, but they are part of building the product in a very real and tangible way that can’t be replicated in larger places unless you’re a billionaire. Again, no need to belabor this as I’ve covered it many times before, such as this piece discussing a New York Magazine article on Buffalo.

Summing Up

Some of the things I heard people say in Vegas are things I hear people in all similar sized cities say. Like running into people you know. For example, a couple months ago a guy in Providence told me that if he had a list of people he needed to meet, he could just spend a day in various coffee shops downtown and would probably run into most of them without even bothering to set up an appointment. Even today every time I’m in Indy I run into someone I know walking down the street. You can’t escape the collisions!

All this to say, while I love what they’ve got going in Vegas, it might not be quite as unique as they think it is. Certainly there’s competition out there for the title of top community oriented city.

Where I do think they’ve got a window of having a genuine leg up is the idea of creating the future of a city. Downtown Vegas is almost literally starting from nothing. The “Providence Renaissance” already had a book written about it. If you’re looking to get in on the ground floor, Vegas is probably one of your better options.

Monday, May 27th, 2013

The Downtown Project in Las Vegas, an attempt to completely reinvent downtown Las Vegas spearheaded by Zappos CEO Tony Hsieh, is one of the better known downtown revitalization initiatives in America. I’ve been planning to write on it since I saw Tony speak about it in Providence last fall. I was kicked in the pants to finally do so by a trip I took to Vegas last week to check the Downtown Project out.

Before going any further, I should disclose that I stayed there for free in one of the project’s “crash pad” apartments (more on those later). I also previously had a small financial relationship with affiliated entity. And I bought my running shoes on Zappos and might have gotten a free upgrade on shipping. But while this article will be very positive on Downtown Project, please stay tuned for part two before dismissing me as a shill. That’s where I plan to cover the negatives.

What Is the Downtown Project?

There’s nobody better to tell you want the Downtown Project is than Tony Hsieh himself. Here’s the talk he gave on it in Providence at BIF-8, a sort of TED-like conference. If the video doesn’t display for you, click here.

In brief, Downtown Project is seeking to reinvent downtown Las Vegas as a community oriented innovation hub. The genesis was Zappos’ purchase of the old Las Vegas city hall as a headquarters. Rather than a traditional tech campus like you might try to find in the suburbs, Tony wanted to build an urban campus more like NYU where Zappos was integrated into the city.

Here’s a picture of City Hall/Zappos future headquarters:

This was not an entirely altruistic move. Research shows that corporations have sub-linear scaling. That is, they become less productive for innovation as they get bigger. But cities have super-linear scaling as they get larger. That is, cities get more productive for innovation as they grow larger. Part of the idea of Downtown Project is to preserve the innovative and productive capacity of Zappos as it scales by hybridizing the company with the urban environment of downtown Las Vegas.

If you’ve read Tony’s book Delivering Happiness you know that customer service is Zappos differentiator, and its company culture is the foundation of making service and everything else they do happen. So unsurprisingly, culture is a big part of what the Downtown Project is setting out to do. There are three project goals. They want to make downtown Las Vegas:

A true live/work/play environment

The most community-oriented downtown in the world

The co-working and co-learning capital of the world

The strategy to accomplish this is basically Ed Glaeser meets Richard Florida. It’s about density, creative class activities, collisions (aka serendipitous interactions), and openness (aka tolerance). From there, as Tony puts it, “The magic will happen on its own.” Or that’s the theory. The magic is intended to be happiness, luckiness, innovation, and productivity.

To make this happen Tony raised $350 million for the Downtown Project. It’s a separate entity from Zappos though it isn’t clear who the investors behind it actually are. (The information may be out there somewhere. Some have suggested Tony is paying for the entire thing himself. Once before he took every penny he made from selling a startup and rolled it into Zappos, so I guess it’s possible. He certainly has a huge appetite for risk. However, when I’ve heard him describe the project, it has only been as “privately funded” which suggests other investors. Given that this is in effect a Zappos campus buildout project, one would hope the company is actually contributing, especially as Amazon now owns it. Whatever the case, clearly Tony is calling the shots and is personally involved at the most intimate level).

Now that sounds like a lot of money, but you could easily spend way more than that on just one real estate project. So instead of just trying to build a bunch of apartments or something, a good chunk of the money is penciled in for “software” type of activities. The allocation is $200M for real estate, $50M for tech startups, $50M for small businesses, and $50M for education, arts, and culture. The real estate money seems to be going quickly as the Las Vegas Sun has reported that the Downtown Project has already spent at least $93 million just on land acquisition, buying 28 acres, mostly along Fremont between Las Vegas Blvd. and Maryland. Their ability to transform the city through purely building would appear to be limited.

The software consists of two venture capital funds. One is going for traditional tech startups, many of which Tony is personally recruiting to Las Vegas. So far there have been about 30 takers, though these are mostly very small enterprises. The other is for small business infrastructure like boutiques, coffee shops, and restaurants with a focus on owner-operated businesses that are unique or best in class.

Both of these are bona fide investment funds, but the focus is not necessarily short term profits. Rather, Tony likes to talk about “Return on Community” as their metric. This is really an investment mindset of necessity. Downtown Vegas has a huge chicken and egg problem. It won’t be attractive to business and residents unless there are cool things to do and the services people want. But the service oriented businesses won’t open until there’s demand. The Downtown Project is trying to solve this by in effect being a source of “patient equity” by pre-funding the services until critical mass is achieved. And of course the demand side is in part being addressed both by the Zappos move and the tech startup initiative. The goal is basically acceleration of what might have happened organically, though it’s too early to tell if there will be success.

I’m not sure what all is in the arts and education fund, but there’s plenty going on in those areas, including a downtown speaker series (with a theater to house it), the purchase of public art from the likes of Burning Man, and a major music festival called Life Is Beautiful. This category seems to be a catchall for filling in the gaps between the others. I’m not sure what fund these fall into, but there are also co-working spaces for fashion (Stitch Factory) and tech (Work in Progress) with a Tech Shop like space coming soon.

The project focus seems to be principally business attraction and programming. There’s little purely residential development to speak of, in part because that type of bricks and mortar project is so expensive. I’m sure the hope is that the environment will draw developer interest to provide the housing as demand is stimulated.

To sum up, Downtown Project is Tony Hsieh as real estate developer + venture capitalist + philanthropist. In effect, he is trying to be a curator/impresario for downtown Las Vegas.

Project Success Factors

I think there are two main things that the Downtown Project has going for it: the guy behind it and the city it is in.

The first is the man himself, Tony Hsieh. First, he’s a successful, proven serial entrepreneur. He also clearly isn’t scared off by massive risk. Beyond this, he just has general gettitude on cities, which is something that too few people calling the shots in the redevelopment efforts of similar sized cities can say. Because he runs basically the highest profile non-casino business in down, he’s got the gravitas (and the money) to convince the civic establishment to go along with way he wants. Or at least to get out of his way. In too many cities, the people who know what’s up are marginal and uninfluential versus traditional power players. The knowledge capital is there, but it’s not paired up with clout like it is with Tony. And as a superstar entrepreneur, he can command massive attention outside Las Vegas, as well as be very influential in recruitment of startups, etc. Tony H. is clearly the indispensable man on this project.

But Vegas is also the right city. I come at this as someone who has been a champion for overlooked post-industrial cities in the Heartland. So I’m guessing my reaction when I saw downtown Vegas is pretty similar to what advocates from other similar sized cities would say: This is it!?

Let’s be honest, what’s actually been physically achieved in downtown Las Vegas to date is quite limited. The Downcity Arts District in Providence is better than Fremont East. Over the Rhine and downtown Cincinnati blow Vegas out of the water. Downtown Indy already has more tech employees than Vegas will even after Zappos makes the move. Honestly, it’s a bit infuriating as a guy who lived in Indy, Louisville, and Providence to see a place where so little has happened garner such massive press and accolades when most other regions the size of Vegas have done more while getting far less attention.

However, I think we need to get a sense of perspective. The first thing to understand is that for all intents and purposes there is no such thing as “downtown” Las Vegas. What they call downtown has some older casinos and some government buildings, but that’s it. There’s no traditional employment or commercial core. There’s a grand total of one decent sized office building in the entire place. Here’s a picture:

That’s basically it. Most of downtown is either vacant or has marginal business activities at best. This old boarded up hotel is typical:

The streets of downtown are nearly deserted even in the middle of the day. You could shoot a cannon off and not hit anything.

By the way, that new building is the federal court house. The tall buildings further away are on the Strip. Here’s what you see across the street from Zappos:

Las Vegas has the single most savagely bleak downtown of any major city I’ve ever visited. The Downtown Project is almost literally starting at zero. There are practically no assets. So anything that the Downtown Project accomplishes needs to be seen against that backdrop. Most of these other cities have been at the downtown redevelopment game for 30+ years, have massive architectural and institutional assets, and have already been the recipients of untold billions in investment, much of it public money. There’s next to none of that in Vegas. Frankly when you see what’s already been done and is being done with $350M – and so quickly – it almost makes you weep to think about the billion dollars or so in taxpayer money that has gone into stadiums and arenas alone in so many other smaller cities. Oh, what could have been done with that instead!

Fremont East, an exception to the rule of bleakness. Most of the establishments on this block are not gambling oriented. The core of the Downtown Project is to extend this several blocks to the east. Image via Flickr/davelawrence8

At this point you may be wondering why I say this is a success factor. Simply, because it’s clear the elite of Las Vegas have completely abandoned and turned their backs on downtown. If they had even a smidgen of pride in their city, they would never have let it get like this with no effort to change it. This leaves the institutional playing field clear for people who actually know what they are doing.

I was chatting with one of the Downtown Project employees who is from Rhode Island. He compared the ease of getting things done in Las Vegas with the near impossibility in Rhode Island. In most places, there’s a spider web of competing land interests, power brokers, politicians, etc. all fighting over what happens downtown (especially who gets to receive all the subsidies). This seems to be immeasurably less true in Vegas. All of the action is on the Strip, so the downtown playing field is wide open. This is one place where the term “blank canvas” might really be appropriate. There’s probably an ability to execute in Las Vegas that simply doesn’t exist in other cities because of the lack of competing interests. (This is also a huge problem for Downtown Project, which I’ll cover in the next installment).

Project Highlights

I want to wrap up this part with a look at some of the highlights of what Downtown Project is doing.

Actually, the most compelling thing that they are doing, a combination of what they call “Subscribe to Las Vegas” and “Las Vegas Makes You Smarter,” I’m going to save for part two so I can use them as the exception that proves the rule. However, there are some other very interesting things.

One is that Las Vegas is the only city I’ve ever visited that actually has sales and not just marketing. Let me explain. Every city in America obsesses over talent and spends beaucoup dollars on various talent initiatives, etc. Similarly, we hear about startups and building tech communities. But while everybody says they want this stuff, and while everyone has a web site and well-funded booster clubs, what nobody actually tries to do ever is actually recruit people unless there’s a specific job opening they are trying to fill.

I always like to do my “Urbanophile test” when I go speak somewhere. Obviously if people are willing pay me to come speak to them, they must think there’s at least some value I bring. But how many places I visit will actually attempt to sell me on their community as a place I might want to live? The answer is zero. I’ve talked to more than enough people to know this is a common occurrence. Nobody is actually selling their city.

Vegas is different. Downtown Project, and Tony personally, are aggressively involved in sales. They leased out 50ish units in a residential high rise called the Ogden (one of only a handful of residential properties downtown). They use these as what they call “crash pads.” They are for people who want to come check out downtown Vegas and the Downtown Project to stay free. They also make sure to showcase what they are doing. And they are going to try to show you how downtown Vegas could be a fit for you or your business. Tony himself is personally involved with this. I was able to take a small group walking tour with him, and part of his agenda was trying to sell a small retailer on setting up shop in a retail development they called Container Park. Here’s this guy who is a multi-mega-millionaire personally recruiting a small business. Hard to imagine there’s a lot of that going on in other places. Think having a tech rock star personally making the ask helps bring small tech outfits to Vegas? You bet it does. Unlike 99% of other cities in America, the downtown Vegas crowd is actually asking for the business.

The Ogden, home of the Downtown Project “crash pads” and what Tony calls the project’s “secret weapon” – Image via Business Insider (lots of good photos of downtown Vegas and the Downtown Project on that page)

Another item, as I highlighted earlier, is capital efficiency. It’s basically the Zappos do more with less ethos. A major retail development will be made out of shipping containers. A new hotel will be Airstream trailers. A casino called the Gold Spike is getting a fairly lo-fi makeover instead of getting scraped and replaced with a Taj Mahal. All of these are stretching $350M at lot further than it would go in most cities. Part of this is obviously of necessity, but is has big benefits. As Jamie Lerner of Curitiba put it, “If you want creativity, cut one zero from your budget. If you want sustainability, cut two zeros. If you want to make it happen, do it fast.”

The car share program they are setting up is also interesting. Firstly, the backbone of the fleet will be 100 Teslas. How cool is that? They are planning to do an entirely electric fleet. Also, the idea is to integrate bike share and every other mode of transport you might need into the same system, and have it accessible from your phone.

Lastly, a couple of the projects – the container space and a school – are oriented towards children. This is very rare to see, as families and children are simply not part of the equation in most cities that are targeting the “young and restless.” While the ubiquity of sexually oriented material in downtown Vegas means this will never be a truly kid-friendly environment, there’s at least an effort being made.

That’s a look at the project and a number of the positives about it. If this seems like too much puffery for a traditional Urbanophile post, stay tuned. Thursday I’ll take a brief look at the nature of community and collisions in small cities. Then I’ll follow-up with part two of this series where I examine my reservations about the project and the challenges it faces. Stay tuned.

Tuesday, October 9th, 2012

[ I was privileged to get to run a few pieces written by Drew Austin that originally appeared in the Where blog. Drew is back, now with his own blog called Kneeling Bus. I highly recommended it as his observations and conclusions are often of a type you can’t find in your typical urban blog. Drew can make you think. Here’s a piece he wrote recently to give you a sample. I’m including this one because of a recent debate in the comments about bricks and mortar versus online retail – Aaron. ]

One of the more interesting recent developments in the urban planning sphere has been Tony Hsieh’s multimillion-dollar investment in revitalizing downtown Las Vegas. Hsieh, the CEO of online shoe retailer Zappos, wants to redevelop the city’s core with his company’s offices as the anchor, creating a dense and vibrant environment where his creative class employees can live, work, and otherwise thrive. The plan reflects a corporate philosophy that applies Jane Jacobs’ urbanist principles to office environments, an approach explained well by Malcolm Gladwell, but Hsieh’s scheme is unique in that it won’t be confined to the Zappos headquarters: Hsieh wants to remake downtown Las Vegas as a whole. In both cases, a more innovative workplace culture is the ultimate goal, but Hsieh seems interested in creating something with positive externalities.

Hsieh’s plan for Las Vegas is idealistic, ambitious, and controversial, but most of all it rests upon a great irony: Zappos has perfected a business model that undermines physical retail and thus helps to erode the vitality of many American downtowns. The clearest example of this is Amazon’s impact on bookstores. If you live in New York or San Francisco you might not understand how much a Borders could matter to a city’s downtown, but many smaller cities with fewer cultural assets depend more on whatever they’ve got. In many cases, “what they’ve got” has been a chain bookstore like Borders (which can remain vacant for years after the tenant goes away—I’ve seen it happen). While Zappos has not affected shoe stores as drastically as Amazon has affected bookstores, the company has certainly captured plenty of revenue that shoppers previously spent in their own city’s commercial districts. The basic economic reality that Zappos represents and Hsieh’s high-profile, symbolic intervention in downtown Las Vegas are seemingly at odds: the latter putting a band-aid on a wound the former is currently making worse.

Bookstores and a few other niches aside, we haven’t really begun to see the full impact of online shopping on urban retail. E-commerce has become much more sophisticated in the last few years, with Amazon Prime offering a level of convenience that rivals a trip to the CVS on the corner, and it would not be surprising to see many other types of stores fall by the wayside as their online competition surpasses them in convenience. The logical conclusion of those developments is the (admittedly extreme) prediction made by Stephen Gordon: In the future everything will be a coffee shop. That is, the only spaces we’ll need for working, shopping, and learning are comfortable places where we can get on the internet together.

If everything will eventually be a coffee shop, then Tony Hsieh’s business and his Las Vegas plan start to seem more consistent. They’re both manifestations of what I’m going to call the Meatspace City: the fully wired urban condition. Even when online shopping becomes entirely frictionless, a lot of shopping will still happen in meatspace because of its tactile nature. Shoe shopping, for example, generally requires trying the shoes on. Book shopping is much less tactile, which is why the internet absorbed it so easily. Shopping is slowly bifurcating into a component easily handled online (price comparison, item selection, payment) and a component best accomplished in a physical store (trying things on, picking them up). Increasingly, stores will be showrooms where we decide what we want and then order it online (see: Bonobos). Urban commerce will be increasingly based upon the purely physical: food, drink, showrooms, and coffee shops. Brooklyn feels like it’s getting there. Everything the internet can’t do better, and only those things. The Meatspace City.

Tuesday, January 5th, 2010

[ I’ve touted Jarrett Walker’s Human Transit blog before. It is an incredible resource for non-dogmatic analysis of transit issues from a professional in the field of transit design. He also does more general writing about cities from time to time, including this piece, which is reproduced with permission. If you like this piece, you might also want to check out Creature of the Shade, his personal urban travel blog. – Aaron ]

Tired of arguing about streetcars? Let's take a break and talk about something we're more likely to agree on — Las Vegas!

While the city plays a crucial role in American culture as a test-site for exotic street names, I suspect we'd mostly agree that it's not going to be a leader in sustainable urban form anytime soon. While the grid pattern of the city has some advantages (more on grids soon), Las Vegas has a particularly bad habit of building blocks of apartments in places where efficient transit will never be able to serve them, and where basic commercial needs are still too far to walk, thus achieving all of density's disadvantages and none of its benefits.

But there are surprises. I just completed my annual trip to Las Vegas, to see family there, and thought I'd update this 2007 item from my personal blog about this capital of churn:

All urbanists are supposed to hate Las Vegas. Sprawling, car-dependent, water-wasting, Las Vegas is almost gleefully unsustainable. Yet walking the Strip last month, and driving it again late at night, I was forced to refine my disapproval. In its energy the Strip reminded me of giant tropical annual plants, like the banana tree, which are designed to burn themselves out and collapse in short order.

The metaphor is wrong as ecology — plenty of unsustainable destruction is bound up in Las Vegas’s cycles of revision — but the admiration I have for banana trees, their ability to hurl themselves to tree-size without any of the trappings of permanence, resembles the feeling of walking a Las Vegas Strip where virtually nothing is 10 years old, where everything is an endless novelty, and where today’s new towers are dwarfed only by construction cranes promising an even bigger tomorrow.

A generation ago, every student of urbanism or architecture read Robert Venturi’s 1972 book Learning from Las Vegas. In a now-familiar attention-grabbing move, Venturi sought meaning in a place that the intelligentsia had scorned, in this case the hotel-casinos, parking lots, and enormous flashing signs of the Las Vegas Strip. Las Vegas, he argued, heralded a new but perfectly legitimate aesthetic, one that we had all better study to be ready for the future.

The book made me notice that I give my own environmental values a veto over my sense of beauty and ugliness, at least as applied to cities. To me, a hot-desert city designed to waste water and oil was simply delusional, and there was no point in arguing about the aesthetic merits of a delusion. I resented Venturi lumping me in with a paper-tiger intelligentsia that condemned Las Vegas as ugly, but if asked I’d have said yes, any human landscape that conditions its citizens to think of scarce resources as free would never appear beautiful to me in aggregate, no matter how beautiful parts of it might be.

I don’t always conflate the true with the beautiful, and the delusional with the ugly; I’m receptive to fantasy in literature and film, and I did a degree in theatre after all. But a city is an act of collective imagining, one that conditions its citizens to unconscious habits even more than mass-media do. An efficient city with no imagination is dull, but one founded on delusions about the capacity of its land is suicidal, and I don’t entertain aesthetic comparisons between different kinds of suicide.

Although Venturi intended Learning from Las Vegas as an aesthetic study, the book is typical of much anti-environmental writing on urban issues. The standard move in these works is to treat environmental concerns as though they were aesthetic ones, and then take a long view in which these aesthetic arguments look narrow and culturally contingent, as aeshetic arguments always do. This move — ridiculing environmental judgments as though they were aesthetic ones — is sadly common these days; Robert Bruegmann's book Sprawl: A Concise History is an especially painful recent example.

But back to Las Vegas. Seen from the air, its sprawl clearly signifies permanent car dependence on a massive scale. But in its heart(s), and its face to the world, Las Vegas has rediscovered pedestrian scale, and swept Venturi into the ashheap.

Of the major Strip hotels that Venturi studied in 1972, every single one has now been demolished and rebuilt on a larger scale, and even today the working hotels are haunted by cranes promising still larger towers in the future. (I wrote those words in 2007, but they're still true in 2009. The lead-time for development is so long that it will take another year to see the full stop to construction that you'd expect the crash of '08 to induce.)

The old Strip was a standard car-based fantasy: each hotel/casino complex was its own unrelated composition, situated up to 1/4 mile from the street behind a vast parking lot. Today, the parking has been moved to structures in back, so that the hotels can reach toward each other with walkways and courtyards to create a vast continuous pedestrian realm. Competing hotels find that they both come out ahead if people can walk from one to the other, and even further ahead if they plug into public transportation, including both the sexy casino-funded monorail and the unremarkable but jam-packed double-decker buses, called "The Deuce," that ply the street. The effect is an extraordinary massing of pedestrians typical of San Francisco, New York, and other similar bastions of the urbanist left.

(The 24-hour nature of the economy also ensures 24-hour transit service, an unusual feature in a city of this size.)

There’s plenty to dislike about Las Vegas, but as I walked the Strip, I had to acknowledge that it was reaching out to me, welcoming me as a pedestrian. This new principle of design, more than the ostensible new preoccupation with “family” entertainment, is what makes the Strip seem so much less sleazy than the place Robert Venturi and I both knew in the 1970s. Even I contributed to the new economy, buying a latte and a margarita in the course of the afternoon. I’d never have done that if I’d had to drive there.

Wisconsin is ordering Talgo rail cars capable of 200 MPH operation. These will be placed in service on the Amtrak Hiawatha line for now. This seems to be an effort to build HSR support in Wisconsin, boost its chances of federal funding, and to secure the US manufacturing site for the trainsets.

A mix of federal and state funding is finally getting the CREATE program off the ground in Chicago. This is designed to both dramatically reduce freight rail congestion in Chicago, and also to boost passenger service (Metra and HSR) by building several overpasses.

The CTA “Max” car experiment on the Brown Line came to a halt. This was where seats were removed to make more room for standees and expand capacity. Apparently passengers hated them. That’s why you do a trial. And I think this was definitely a good experiment to try. Kudos to the CTA for first doing it, then being willing to back track when it didn’t get the passenger response they hoped for.

Given the Midwest bashing of most Forbes surveys, it’s good to see at least some places here get some love.

Newspapers and Urban Culture

There was a mini-furor in online communities in Columbus about this article about dining in Columbus. The Dispatch apparently runs these type of “Where I Eat” articles profiling various locals. In this version, a woman talks about Applebee’s being her favorite restaurant, as well as saying that’s where she would take someone new to Columbus.

Now, nothing against this woman personally. In fact, I’d have to second her endorsement of Potbelly’s, chain though it might be. But there is a legitimate concern about what type of message this is sending about Columbus. I’m not saying newspapers need to be civic boosters, but what is the journalism value in something like this? And how was this person selected?

Clearly, stories like this only allow people from larger cities to have a laugh and reinforces the prejudice against smaller Midwest cities that exists out there in the world. Editors should take care to consider not just how articles will be perceived locally, but also nationally and internationally in the age of the internet. I’m sure there are many fine local restaurants in Columbus, and to cherry pick someone who says Applebee’s is their favorite place does the city a disservice.

8664 Update

The Louisville Metro council has to approve the creation of a new tolling authority to pay for the Ohio River Bridges Project. Some councilors who wanted to have more debate and hearings introduced an ordinance for that which was shot down. However, the recitations section had an amazing collection of facts worth noting. Here is an excerpt (hat tip Broken Sidewalk):

WHEREAS, the Ohio River Bridges Project (ORBP) is now estimated to cost $4.1 Billion; and

WHEREAS, State of Kentucky traffic counts indicate that traffic in Spaghetti Junction did not increase from 1992 to 2007; and

WHEREAS, in 2008 traffic volumes declined by more than 11% on the Kennedy Bridge and by more than 5% in Spaghetti Junction; and

WHEREAS, according to the Texas Transportation Institute 2009 Urban Mobility Report, congestion in Louisville “stayed relatively constant” over the decade from 1997 to 2007; and

WHEREAS, according to INRIX National Traffic Scorecard, in 2008 traffic congestion in Louisville decreased by 39%; and

WHEREAS, six years of actual traffic counts are now available to compare to the assumptions in the ORBP 2003 Environmental Impact Study; and

WHEREAS, a November 2008 study conducted by Wilbur Smith and Associates for Kentucky Transportation Cabinet (KYTC) determined that an alternative which included only an East End Bridge provided the same “system wide performance” as the Ohio River Bridges Project;

Migration Blowback

There’s plenty of talk of brain drain and people being sucked up into global cities. But a counter-trend is starting to attract notice as some become disenchanted with high costs and other hassles. And it is affecting surprising places, such as Scranton, PA, which is now growing in population again.

There’s a distinctly white-collar movement behind Scranton’s comeback. A return of college-educated natives from cities like New York and Philadelphia is fueling a population rise and a civic makeover. Bringing them back are the very small-town qualities many once wanted to escape: the likelihood of meeting acquaintances and relatives on the streets. The embrace here of modest ambition. The deeply held belief — only heightened by ridicule from the outside world — that Scranton matters.…For six decades Scranton lost an average of a thousand residents a year, many bound for college. The return of even a fraction of them — along with their families — could confer substantial economic benefits. “There was a diaspora of Scrantonians, and now we’re inviting them back,” says the Chamber’s Mr. Burke. The group has a campaign called Rediscovering Scranton, which includes a Web site with testimonials from returning natives.

A population rise of about 3,000 in the last two years, to about 75,000, has given hope that the long exodus is over. School enrollment is up to 10,000 from 8,500 seven years ago. And downtown is buzzing with the sounds of construction. A Radisson hotel is in the city’s old train station. Other recently vacant buildings now house advertising agencies, architectural firms and financial offices, many started by professionals who have returned.

Cities like Scranton lack a lot of urban amenities. While those are to some extent needed to attract people, they can also be a lagging indicator. The amenities are built in response to people moving in, and its feeds on itself. Here’s another perspective from NPR. Definitely something to watch, though to early to call a major trend. More like “green shoots”.

“Starchitecture” in Action

If you needed any more indication that starchitecture as currently practiced is past its sell-by date, check out this piece in the Las Vegas Weekly about this Frank Gehry building:

A Lesson in Skepticism

This came complete with a realistic web site, as well as Facebook pages and a Twitter account.

I don’t think this really fooled anyone, but what I find interesting is just how similar to almost every real proposal the rhetoric was. For example:

New York City is the cultural and financial capital of the world. It is also our nation’s most densely populated urban area. Yet surprisingly, New York City has no viable airport. JFK, La Guardia and Newark may work for people who live in certain outer boroughs. But they are not an acceptable option for the majority of New Yorkers, requiring travel through some of the most congested traffic arteries in the nation. A journey which by train takes nearly two hours and by automobile can take up to three hours. For a place which purports itself to be the greatest city in the world, this is not a workable model.

Or this from their FAQ:

I own an apartment alongside Central Park. What will Manhattan Airport do to my property value?

History has proven that bringing a transportation amenity to an underserved region elevates the perception and economic well-being of the area. In the past, these types of transformative public works projects have created an influx of interest and new investment in the neighborhoods in which they have been built. There may be some who resist the progress. But as neighborhood residents, small business owners and local civic organizations begin to experience the economic “trickle-down” effect these types of large scale redevelopment projects have precipitated time and time again; Manhattan Airport will be embraced.

What about the environmental impact of building Manhattan Airport?

Research shows that single-passenger car-service and taxi trips between Manhattan and JFK/EWR/LGA account for up to 9% of automobile-created carbon-based emissions in the region. Reducing our environmental impact is a major concern for all of us and preliminary findings indicate that building Manhattan Airport can be a critical first step as we strive to live up to our long-neglected environmental responsibility

I think we’ve all got to admit that the arguments in favor of most projects don’t sound much more impressive than this. They are plausible stories about what would happen, backed up by research that it is difficult to independently evaluate. History has shown that our cities have built way more than their fair share of “Manhattan Airports” based on this exact type of faulty reasoning, many of which had to be ripped out later at significant cost. Of course, not everything will work out as planned and any entrepreneurial venture has high risk of failure, but we should at least look at these things with clear eyed realism. That includes, of course, even the things I’ve spoken in favor of.

National and International Roundup

The NYT had a great article on cities that are uncovering long buried waterways, focusing on Seoul. In previous years it was not uncommon to bury urban streams into underground channels that doubled as sewers. Now cities are turning these back into surface streams as recreational and neighborhood amenities.

Let the water wars commence. A landmark federal ruling says Atlanta can no longer draw water from Lake Lanier unless it reaches a water sharing agreement with surrounding states. It has three years to do so. This is big, big news so stay tuned to this one.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

About the Urbanophile

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.